Certification and quality management provider acquired at 9.1x EBITDA
Thu, 27 Jul 2023 | BUSINESS SALE
IMSM Holdings Limited and International Management Systems Marketing Limited, which together form IMSM, have been acquired by business-critical software and services provider Marlowe in a deal valued at up to £17.4 million.
Based in Malmesbury, Wiltshire, IMSM is a provider of certification and quality management. The company provides ISO auditing and certification services, auditing the quality of its clients’ business processes and internal systems to ensure ISO standards compliance in areas including information security, environmental management and safety management. The firm has around 5,000 UK and international clients and provides compliance services on a recurring basis.
IMSM’s acquisition by Marlowe will comprise an upfront £12.9 million cash consideration, an additional £3 million paid through the issuing of 597,609 ordinary shares at 50p each, and a performance-related consideration of approximately £1.5 million, payable upon the first year of ownership.
If the full consideration is paid, it would represent approximately a 9.1x multiple of IMSM’s EBITDA of £1.9 million for the year ending December 31 2022, generated on revenues of around £12.2 million.
Marlowe has said that the acquisition represents a “key step” in its strategy to deepen its Governance, Risk and Compliance (GRC) capabilities in the ISO certification industry. The company added it would also generate cross-selling opportunities within its existing customer base, as well as opportunities to digitalise IMSM’s services in collaboration with its own SaaS offering.
Marlow Chief Executive Alex Dacre commented: "The acquisition of IMSM broadens the capabilities of our Governance Risk and Compliance division into the attractive and highly complementary ISO auditing and certification market.”
He added: "This is a large and fragmented market, and the addition of IMSM will enable us to address a core component of our clients' compliance requirements. This acquisition is consistent with our strategy to selectively execute on bolt-on acquisitions whilst maintaining leverage in the region of 2x EBITDA, within the Board's guided range."
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